Nissan is still navigating financial rough seas
According to reports by The Wall Street Journal and Bloomberg, Japanese automaker Nissan has announced a fifth straight quarterly net loss as U.S. tariffs proved a major speed bump for the company as it attempts to reorient itself.
In an announcement on November 6, Tokyo time, Nissan reported a net loss of 106.2 billion yen (~$689.1 million) for the fiscal quarter, which ran from July to September, as U.S. tariffs proved a boon to its operating profit, boosting it by nearly $500 million. Last quarter, on June 30, it reported a significant loss of ¥115.7 billion ($782 million) during the period from April to June.
Nissan says that it anticipates sales to crawl back during the second half of its fiscal year as new models come on sale, and for its auto business to generate positive cash flow, noting that it is on track to achieve its cost-savings target of 500 billion yen (~$3.26 billion) by March 2027.
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Additionally, it is set to get 73.9 billion yen (~$482.97 million) from the sale of its headquarters. Nissan says that it will continue to occupy the building as its global base through a lend-lease agreement, noting that the proceeds of its sale will go toward the company’s restructuring efforts. Back in August, KKR & Co. offered around ¥90 billion ($610 million) for the prime space in Yokohama, located just south of Tokyo, through its Japanese real estate arm, KJR Management.
“We are also optimizing assets to unlock value,” Chief Executive Ivan Espinosa said, per Automotive News. “This ensures Nissan’s continued presence and commitment to Yokohama while ensuring no impact on employees or operations.”
At the same time, the automaker also estimated that it will lose nearly 275 billion yen (~$1.8 billion) due to tariffs, as well as foreign exchange volatility and supply-chain risks, including a potential shortage of chips from Nexperia.
“Our first-half results reflect the challenges we face, but they also confirm that Nissan is firmly on the path to recovery,” Espinosa said in a statement. “We have made meaningful progress, and while there is more to do, the foundation for future success is in place.”
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Nissan is shaking up its operations
Nissan is expected to move forward with its Re:Nissan plan, a corporate austerity initiative that aims to lighten the company’s load by shedding excess capacity at some of its factories. According to a recent report by Automotive News, Nissan CEO Ivan Espinosa confirmed that the company will end production at the Cooperation Manufacturing Plant Aguascalientes (COMPAS) joint venture factory, where it collaborates with Mercedes-Benz in Mexico, by the end of this month.
Nissan produces the Infiniti QX50 and QX55 crossovers at the plant, which also makes the Mercedes-Benz GLB. Per the Re:Nissan plan, Nissan is set to close seven of its 17 plants worldwide, aiming to shed production capacity by 2.5 million to 3 million vehicles by the end of the 2027-2028 fiscal year. The automaker already announced its intentions to close plants in Argentina and India, as well as the Civac plant in Mexico, the automaker’s first factory outside Japan. Nissan also plans to close the Oppama and Shatai Shonan plants in Japan.
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Infiniti may get a Rogue-based crossover, Nissan CEO says
However, in a separate statement to Automotive News at the Japan Mobility Show, Espinosa teased a potential future Infiniti crossover that could be based on the Nissan Rogue, which may be powered by both a conventional gas-engine setup and its e-Power hybrid technology.
“We’ll be renewing the Rogue, and it will come with ICE and e-Power, and we are looking at now whether we should localize more components for these cars in the U.S.,” Espinosa said. “We’re looking at options to make additional derivatives of this car, potentially an Infiniti.”
Final thoughts
Although Nissan is taking strides to streamline vehicle development and identify cost-cutting opportunities, time will tell whether the company can fully return to profitability. According to Kyodo News, Nissan CEO Ivan Espinosa noted that the automaker is still discussing opportunities with rival Japanese automaker Honda in several fields and projects, highlighting its multi-faceted approach in the search for profitability.
